World Bank Chooses U.S. Nominee Kim as its New President

By Sandrine Rastello -
Apr 16, 2012

Jim Yong Kim was chosen to be
president of the World Bank, becoming the first physician and
Asian-American to head the lender after emerging markets failed
to rally around a challenger to the U.S. monopoly on the job.

The World Bank board of directors said today it chose
Dartmouth College President Kim to succeed Robert Zoellick,
whose term ends June 30. A specialist in HIV/AIDS with a Ph.D.
in anthropology, Kim, 52, faced rival bids from Nigeria and
Colombia.

The candidacies “enriched the discussion of the role of
the president and of the World Bank Group’s future direction,”
the board said in an e-mailed statement. “The final nominees
received support from different member countries, which
reflected the high caliber of the candidates.”

Kim, a graduate of Harvard Medical School, breaks the mold
of World Bank presidents, who have been drawn from government
and finance. Kim, who was born in Korea and grew up in the U.S.,
has pledged to be a bridge between developing and advanced
economies at the poverty-fighting institution, which committed
$57 billion last year on everything from building roads to
taking stakes in companies in emerging economies.

His expertise on health and development issues, as well as
his experience at Dartmouth, “puts him in a prime position to
initiate a much-needed reorientation of the World Bank’s role in
global development,” said Eswar Prasad, a senior fellow at the
Brookings Institution and a former official at the International
Monetary Fund.

The failure of emerging markets to unite behind a candidate
is reminiscent of the contest to head the IMF last year, when
Mexican Central Bank Governor Agustin Carstens lost to then-
French Finance Minister Christine Lagarde. The IMF has always
been headed by a European.

The bank’s approval of Kim “reflects how global governance
continues to lag behind changing economic realities,” Prasad
said. “Emerging-market economies are increasingly dominant in
global trade, finance and output, but the advanced economies
continue to maintain their positions of privilege at major
international financial institutions.”

Process Criticized

South African Finance Minister Pravin Gordhan, whose
country nominated Okonjo-Iweala, today criticized the bank’s
selection process, saying it “falls short” for not being
transparent or merit-based.

“By our participation, we have won important victories,”
Okonjo-Iweala told reporters in Abuja today. “The process of
choosing a World Bank president will never be the same again.”

Kim will take over as financing to developing economies is
increasingly provided by private investors as well as large
emerging markets such as China, which is challenging the bank
with its own lending programs in Africa and Latin America.

“He will need to better engage China and” other countries
such as India, Russia and Brazil “to contribute more funding
through the bank as opposed to bilateral channels,” said Bessma
Momani, a political science professor at the University of
Waterloo in Canada.

Kim, who is in Peru, said in a statement today that he
would seek to realign the bank “with a rapidly changing
world,” promising to “foster an institution that responds
effectively to the needs of its diverse clients and donors.”

Raised Questions

His focus on health and social projects and a lack of
experience in economic policy or financial markets has raised
questions about his capacity to head an institution with
expertise ranging from infrastructure to climate change.

“It’s a legitimate concern, not because he couldn’t learn
and have good advice once in office, but because that may take
some time,” said Nancy Birdsall, president of the Washington-
based Center for Global Development and a former World Bank
official.

Kim, the son of a dentist, grew up in Muscatine, Iowa,
where he played high school football, basketball and golf. He
graduated from Brown University in Providence, Rhode Island, in
1982 and went on to receive degrees in medicine and anthropology
at Harvard University, in Cambridge, Massachusetts.

In 1987, while at Harvard, Kim co-founded Partners in
Health, a nonprofit organization that has opened clinics in
countries including Haiti and Peru. Working for the group in
Peru, he helped develop a treatment program for multidrug-
resistant tuberculosis.

‘Science-based Drive’

“His innovations in health-care have helped to save
numerous lives,” Zoellick said in a statement today. At
Dartmouth, “Jim has had to take tough managerial and financial
decisions while running a large, multidisciplinary organization.
His rigorous, science-based drive for results will be invaluable
for the World Bank Group as it modernizes to better serve client
countries in overcoming poverty.”

In a statement to the board of directors last week, Kim
described himself as a good listener with no ideological
approach, whose experience at Dartmouth would help safeguard the
lender’s financial model.

“You would find in me someone who asks hard questions
about the status quo and is not afraid to challenge existing
orthodoxies,” he said.

The World Bank was created at the end of World War II as
part of the postwar global economic order, along with the IMF.
Set up to rebuild war-ravaged Europe, it later shifted its focus
to providing financing for projects such as power plants and
dams in developing countries.

As private capital becomes more available, it’s now
counting on the technical expertise that comes with its loans to
attract clients.